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The University of Louisville Foundation terminated former President James Ramsey's chief of staff on Thursday and revealed little about what prompted the move, citing privacy of employee matters.

The firing 40 days before the employment contract for Kathleen Smith was set to expire came as the embattled foundation's board grappled with cleaning up the financial turmoil exposed in a recent report. The outside audit detailed lavish spending and lax oversight.

Smith retired from her university job as Ramsey's chief of staff last September and was placed on paid administrative leave that month in response to a demand from trustees trying to reform the foundation. Her employment agreement was set to expire July 31.

LIke other recent developments involving the foundation and personnel matters, the action ignited a flurry on social media.

Keith Sherman, the interim foundation executive director, released a one-sentence statement saying that Smith is "no longer employed" by the foundation after Ann Oldfather, Smith's attorney, sent a letter to the foundation and some reporters before 8 a.m. saying that Smith was notified late Wednesday that her salary and benefits would cease Thursday.

Oldfather asserted that the termination breached Smith's contract with the foundation and was a "cowardly failure to stand behind a fully transparent salary and compensation decision that never would have been questioned were she one of the highly-compensated men on these boards."

Oldfather said that Smith's salary from both the foundation and university never exceeded $300,000 per year and that the foundation board, "not Kathleen" decided on additional compensation.

She called Smith a "fall girl" for the foundation. Oldfather previously said Smith did nothing wrong and had raised 50 times in donations what she was paid. Earlier this month the lawyer asked to appear before the foundation before it makes any personnel decisions on Smith or takes any legal action to try to recover money from Smith or others.

Sherman and Diane Medley, the foundation board chairwoman, declined to comment when asked about Smith's termination after their meetings. But Medley said that foundation officials and new counsel Franklin Jelsma are still considering if civil action or referrals for a criminal investigation are appropriate.

Because of the review process, Medley said, "we're in a holding pattern."

Foundation CFO Jason Tomlinson was placed on leave a day after the audit was released June 8. Sherman declined to discuss Tomlinson's status, but he told the board that the foundation may need to hire someone to help with the workload.

Meanwhile, the fallout from the scandal came into sharp focus during the morning's meeting of the U of L Real Estate Foundation, an arm of the foundation.

During a discussion on repaying $9.8 million owed by that foundation to the university, interim U of L President Gregory Postel said that officials with the Southern Association of Colleges and Schools Commission on Colleges had notified him that the organization would broaden the scope of an ongoing review of U of L to include the institution's financial control and its long-term financial sustainability.

That organization placed U of L on probation last December, citing concerns over undue political influence after Gov. Matt Bevin abolished the university's board of trustees. The group also warned in January that it may consider whether the university is "exercising appropriate control" over financial resources involving the foundation - which has now come to pass.

The college association plans a site visit to campus in September.

Postel said that he anticipates the organization will have something to say about the repayment plan by the foundation. Board members, in turn, agreed to find out more about what terms might satisfy the college association before reaching a decision on repayment. They initially discussed remitting the money over four or five years.

The foundation has the resources to repay the debt, Sherman said after the meeting, and it will work with university administrators to see that are no problems with the accreditation.

That may eventually be smoothed over, but questions linger over how the scandal will shrink future donations. The foundation acknowledged in April that donations had slipped by $32 million over the prior year, but the loss was exaggerated by a one-time $20 million gift.

David Grissom and Papa John's founder John Schnatter said they wanted to know how "recent events" have affected giving. They asked development director Keith Inman to produce a report next month detailing what's happened with donations and the strategy for regaining donors' confidence.

Reporter Grace Schneider can be reached at 502-582-4082 or gschneider@courier-journal.com.